DUBAI GOLD | 6 FEBRUARY 2025

There are only 190,000 metric tonnes of gold in the world’s reserves, and gold mining is getting harder and harder. Due to its limited availability, gold is seen as a powerful inflation hedge. The following are some of the variables influencing Dubai’s gold prices:

The factors of supply and demand always determine the price of gold. In Dubai, the demand for gold typically rises around wedding or celebration seasons, which is why gold prices peak during those times.

Another element affecting gold prices in Dubai is the US dollar’s peg to the UAE’s Dirham (AED). Gold prices in the United Arab Emirates will be directly impacted by any changes in the value of the US dollar. As a result, when the US dollar appreciates, gold prices decline, and vice versa.

People view gold as a “safe haven.” This suggests that investors rush to buy gold when there is market uncertainty, such as COVID-19, war, etc. Gold can also be used as an inflation hedge. The price of gold will therefore increase if global inflation increases, as it occurred in 2023.

Fiscal policy sometimes affects the price of gold. Increased taxes, import charges, permits to develop more mines, etc., discourage gold returns. Did you wonder why allowing new mines to be drilled had a negative impact on gold prices? The supply of gold would rise with increased mining, and as economics teaches us, the more gold there is, the lower the price. As with any other asset class, technical analysis may be used to predict the direction of the gold price. Stock and index indicators and patterns can be used interchangeably with gold price charts.